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The project consists of the development of new district heating systems and the extension and refurbishment of existing district heating and cooling networks, including new heating/cooling generation facilities in various cities in France.
In line with the EU and national decarbonisation and energy efficiency objectives, the investment plan will mostly substitute central and individual gas heating with a more sustainable and efficient centralised heating/cooling generation mix, resulting in primary energy savings and reduction of emissions of greenhouse gases.
The Project concerns the development, refurbishment and extension of multiple District Heating and Cooling (DH/DC) systems, some of which located in Transition regions in France. The RE share in the DH systems included in the project scope is expected to increase to above 80% on average, as a result of the Project. This will be achieved mostly through the replacement of natural gas-based heating with sustainable energy sources (biomass and geothermal). The cooling service improves efficiency of cold supply. The project generates positive externalities in the form of reduced greenhouse gases and other hazardous emissions given the switch to less carbon-intense heat/cold supply options; and contributes to maintaining or increasing safe delivery of heat/cold.
The Project is in line with EU and EIB policy objectives on climate action (mitigation) and is also fully in line with national RE penetration targets for DH/DC as stated in the French NECP, i.e. 32% RE in gross final energy consumption and 38% share of renewable energy in final heat consumption.
The financing of this project is therefore in line with the Bank's lending priority objectives for Energy (Securing the Enabling Infrastructure and Decarbonising Energy Supply) as well as the transversal objectives on Climate Action (mitigation) and Economic and Social Cohesion.
The Project Quality and Results are overall rated as Very Good, given the expected economic benefits and the ESG analysis.
The EIB support to this operation is expected to provide tangible value-added benefit, positively contributing to the promoter's capital intensive investments by offering more flexible terms compared to the commercial banks. In fact, EIB's involvement provides a flexible financial product to the borrower (e.g. flexible drawdowns, lengthy availability period, etc.), allowing it to diversify its financing sources. Finally, the Bank's capacity to extend a sizable loan from one source is highly appreciated by the client.
Based on the technical characteristics communicated by the promoter at this stage, some heat/cool generation components may be subject to an EIA. The biomass to be used in the several plants will also be subject to the Bank's sustainability criteria, as applicable. The promoter indicated that the project would not cross nor pass nearby any sites of nature conservation importance.
For components under concessions obtained through open competition or under private contracts, the promoter, as a private undertaking, shall be subject to EU private procurement rules. For the components under concessions obtained without prior competition, the promoter would be subject to public procurement and its procurement procedures need to be in line with the relevant applicable EU procurement legislation (Directives 2014/24/EU and/or 2014/25/EU, where applicable, as well as Directive 92/13/EEC), as transposed in the national legislation under the Ordonnance n°2015-899 of 23 July 2015, with publication of the tender and award notices in the Official Journal of the European Union (OJEU), as and where required.